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Tju [1.3M]
3 years ago
9

All else the same, if a bank's liabilities are more sensitive to interest rate fluctuations than are its assets, then ________ i

n interest rates will ________ bank profits. Question 10 options: A) an increase; reduce B) an increase; increase C) a decline; not affect D) a decline; reduce
Business
1 answer:
Bad White [126]3 years ago
6 0

Answer:

A) an increase; reduce

Explanation:

All else the same ,if a bank liabilities are more sensitive to interest rate fluctuations than are its assets, then an increase in interest rates will reduce bank profits.

A bank is said to be sensitive towards to interest rates means that the bank revalue its liabilities on the basis of the change in the interest rates. Thus if the interest rates increases it means the liabilities of the bank has increased on which the bank is liable to pay higher interest which will automatically reduce the bank profits as the interest payable by the bank is an expense for the bank.  

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kicyunya [14]

Answer:

(a)

                          Dr.          Cr.

Feb 1

Investment     $7,200

Cash                            $7,200

Jul 1

Cash               $600

Dividend Income        $600

Sep 1

Cash               $4,300

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(b) Dividend will be shown as other income in the revenue section of Income statement.  Gain on sale of common share will be reported on income statement after operating profit.

Explanation:

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300 Shares Purchase Price =  $12 x 300 = 3,600

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3 years ago
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Anna35 [415]

Answer:

<u>Foreign trade</u>

Explanation:

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Answer:

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I hope the answer will help you. 
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